Technical suggestions

Markets have gone through a phase of consolidation during the previous 1 month. There has been no major trigger in the markets that could have resulted in a decisive move in index. Nifty has faced resistance various times at 74.6% retracement levels at 5315. During the month of January the high was witnessed at 5310 whereas till now low for the Nifty has been 5086. Trading volumes were also on the lower side during the previous few trading sessions.

After a phase of consolidation a break down in the trend has been witnessed in Nifty. 5180 was acting as a strong support, which has been breached and Nifty slipped down to 5085 levels during the day. Selling was witnessed on high volumes across the board.

On the charts we have witnessed a small divergence in RSI (Relative strength Index) and Nifty. This has resulted in a down fall in the markets. Going forward, we expect this negativity to continue for some more trading sessions. This downfall may take Nifty down to 4990 levels. 100 days moving average is near to 4990 from where Nifty is expected to take support.

We may witness some more result reactions which may further make our markets more volatile. One may hold long positions and buy on dips until and unless Nifty does not close below 4990 levels.

First support for Nifty may come in at 4990 which is the 100 days moving average. Below 4990 we may see 4820-4850 levels. On the up side Resistance exist at 5221 after which we may find Nifty reaching the previous highs of 5310 levels.